Correlation Between Pan Jit and Episil Precision

Can any of the company-specific risk be diversified away by investing in both Pan Jit and Episil Precision at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pan Jit and Episil Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pan Jit International and Episil Precision, you can compare the effects of market volatilities on Pan Jit and Episil Precision and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pan Jit with a short position of Episil Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Jit and Episil Precision.

Diversification Opportunities for Pan Jit and Episil Precision

0.76

Correlation Coefficient

Pan Jit  Episil Precision

Poor diversification

The 3 months correlation between Pan and Episil is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pan Jit International and Episil Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episil Precision and Pan Jit is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pan Jit International are associated (or correlated) with Episil Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episil Precision has no effect on the direction of Pan Jit i.e., Pan Jit and Episil Precision go up and down completely randomly.

Pair Corralation between Pan Jit and Episil Precision

Assuming the 90 days trading horizon Pan Jit International is expected to generate 0.67 times more return on investment than Episil Precision. However, Pan Jit International is 1.49 times less risky than Episil Precision. It trades about -0.18 of its potential returns per unit of risk. Episil Precision is currently generating about -0.19 per unit of risk. If you would invest  5,860  in Pan Jit International on October 24, 2024 and sell it today you would lose (1,105) from holding Pan Jit International or give up 18.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pan Jit International  vs.  Episil Precision

Pan Jit International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Jit International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Episil Precision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Episil Precision has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Pan Jit and Episil Precision

The main advantage of trading using opposite Pan Jit and Episil Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Jit position performs unexpectedly, Episil Precision can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Episil Precision will offset losses from the drop in Episil Precision's long position.

The idea behind Pan Jit International and Episil Precision pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.